History of Management
Bus 20
Section 72192
Class 15
Tuesday, October 18, 2011
History of Management Approaches
1) The universal process approach
2) The operational approach
3) The behavioral approach
4) The systems approach
5) The contingency approach
6) The attributes of excellence approach
What is Management?
• Act of organizing people to accomplish
desired goals and objectives using
available resources efficiently and
effectively
• It’s comprised of planning organizing,
staffing, leading and controlling to
accomplish goals
Evolution of Management Techniques
 Early 20th century: America characterized by
heavy industrial business
 Mid-20th centruy : Shift begins from heavily
dominated industrialized society to a mix of industry
and services
 Late 20th century: More manufacturing outsourced
outside US. Rise of high tech fosters larger services
sector
1) The Universal Process
Approach
• Universal Process Approach
– Assumes all organizations require the
same rational management process.
• Core management process remains the
same regardless of the purpose of the
organization.
• The management process can be
reduced to a set of separate functions
and related principles.
1) Henri Fayol’s Universal
Management Process
• Fayol published Administration Industrielle
et Générale in 1916.
– Divided the manager’s job into five
functions:
• Planning
• Organizing
• Command
• Coordination
• Control
1) Henri Fayol’s Universal
Management Process (cont’d)
• Lessons Learned from the Universal Process
Approach
– The management process can be
separated into interdependent functions.
– Management is a continuous process.
– Management is a largely, though not an
entirely, rational process.
– The functional approach is useful because
it specifies what managers should do.
The Operational Approach (cont’d)
• Frederick W. Taylor’s Scientific Management
– Developing performance standards on the basis of
systematic observations and experimentation.
• Standardization of work practices and methods
reduce waste and increase productivity
• Time and task study of workers’ efforts to
maximize productivity and output.
• Systematic selection and training of workers to
increase efficiency and productivity.
• Differential pay incentives based on established
work standards.
The Operational Approach
– Describes the production-oriented area of
management dedicated to improving
efficiency, cutting waste, and improving
quality.
– Covers the technical and quantitative
approaches to management :
• Management science
• Operations research
• Production management
• Operations management
Taylor’s “Disciples”
• Frank and Lillian Gilbreth
– Refined time and motion study methods
for use in work simplification.
• Henry L. Gant
– Refined production control and cost
control techniques.
– Developed the Gantt chart for workscheduling of projects.
– Early advocate of the importance of the
human factor and the importance of
customer service over profits.
The Quality Advocates
• Walter A. Shewhart
– Introduced the concept of statistical quality
control [SPC]
• Kaoru Ishikawa
– Proposed a preventive approach to quality.
– Developed fishbone diagram approach to
problem-solving.
• W. Edwards Deming
– Based his principles on reformed management
style, employee participation, and striving for
continuous improvement [CQI]
Deming’s Impact on Japanese Auto
Industry
•
•
•
•
Post WW II Japan – just surviving
1960’s Japan – cameras & electrtonics
1970’s Japan – learned Deming techniques
1980’s Japan to present – self-explanatory
• Shift from Japan to Taiwan to Korea to
mainland China to ……
The Quality Advocates (cont’d)
• Joseph M. Juran
– Proposed the concept of internal customers,
teamwork, partnerships with suppliers, and
brainstorming.
– Developed Pareto analysis (80/20 rule) as a tool for
separating major problems from minor ones.
• Armand V. Feigenbaum
– Developed the concept of total quality control
[TQC]
• Philip B. Crosby
– Promoted the idea of zero defects (doing it right
the first time). IBM’s six sigma program.
The Operational Approach (cont’d)
• Lessons Learned from the Operational Approach
– A dedication to finding a better way is still
important.
– Using scientific management doesn’t dehumanize
workers.
– Quality advocates, inspired by the scientific
approach, have been right all along about the
importance of quality and continuous
improvement
– The operational approach fostered the
development of operations management.
Normal Curve Standard Deviation
Six Sigma Approach
Six Sigma seeks to improve the quality of process
outputs by identifying and removing the causes
of defects (errors) and minimizing variability
in manufacturing and business processes
A six sigma process is one in which 99.99966% of the
products manufactured are statistically expected to be
free of defects (3.4 defects per million).
3) The Behavioral Approach
• The Human Relations Movement
– An effort to make managers more sensitive
to their employees’ needs.
– It arose out the influences of:
• the threat of unionization.
• the Hawthorne studies.
• the philosophy of industrial humanism.
The Behavioral Approach: Human
Relations Movement
The Behavioral Approach (cont’d)
• The Threat of Unionization
– The Wagner Act of 1935 legalized unionmanagement collective bargaining,
promoting the growth of unions and union
avoidance by firms.
• The Hawthorne Studies (1924)
– The study’s results that productivity was
strongly affected by workers’ attitudes
turned management toward the humanistic
and realistic viewpoint of the “social man”
model.
The Philosophy of Industrial
Humanism
• Elton Mayo
– Believed emotional factors were more
important determinants of productive
efficiency than were physical and logical
factors.
• Mary Parker Follett
– Advocated that managers become aware
of how complex each employee is and how
to motivate employees to cooperate rather
than to demand performance from them.
Hawthorne & Scientific Management
• Time & Motion studies – breaks down tasks into
simple chunks
• Effects of physical environment on workers.
Variables modified to maximize worker productivity
• Lessons Learned:
– Experimenter Effect – workers interpreted that
management cared
– Social effect – studies had positive effect on
worker’s feeling that they were receiving special
treatment. This increased camaraderie and
increade productivity
The Philosophy of Industrial
Humanism (cont’d)
• Douglas McGregor
– Developed Theory X and Theory Y
• Theory X: management’s traditionally
negative view of employees as
unmotivated and unwilling workers.
• Theory Y: the positive view of
employees as energetic, creative, and
willing workers.
Therory X and Y
Organizational Behavior
• Organizational Behavior
– A modern research-oriented approach seeking
to discover the causes of work behavior and
to develop better management techniques.
• Lessons Learned from the Behavioral Approach
– People are the key to productivity.
– Success depends on motivated and skilled
individuals committed to the organization.
– Managerial sensitivity to employees is
necessary to foster the cooperation needed for
high productivity.
4) The Systems Approach
• What is a System?
– A collection of parts that operate interdependently
to achieve a common purpose.
• Systems Approach
– Posits that the performance of the whole is
greater that the sum of the performance of its
parts.
• Analytic versus synthetic thinking: outside-in
thinking versus inside-out thinking.
• Seeks to identify all parts of an organized
activity and how they interact.
The Systems Approach (cont’d)
• Chester I. Barnard’s Early Systems Perspective
– Wrote Functions of the Executive.
– Characterized all organizations as
cooperative systems.
– Defined principle elements in an
organization as
•willingness to serve.
•common purpose.
•communication.
– Strong advocate of business ethics.
General Systems Theory
• General Systems Theory
– An area of study based on the assumptions
that everything is part of a larger,
interdependent arrangement.
General Systems Theory (cont’d)
• Levels of systems
– Each system is a subsystem of the system
above it.
– Identification of systems at various levels
helps translate abstract systems theory into
more concrete terms.
General Systems Theory (cont’d)
• Closed Versus Open Systems
– Closed system
• A self-sufficient entity.
– Open system
• Something that depends on its
surrounding environment for survival.
– Systems are classified open (closed) by
how much (how little) they interact with
their environments.
General Systems Theory (cont’d)
• New Directions in Systems Thinking: Organizational
learning and knowledge management
• Organizations are living and thinking open
systems that learn from experience and engage
in complex mental processes.
• Chaos theory
– Every complex system has a life of its own,
with its own rule book.
• Complex adaptive systems
– Complex systems are self-organizing.
5) The Contingency Approach
• Contingency Approach
– A research effort to determine which
managerial practices and techniques are
appropriate in specific situations.
• Different situations require different
managerial responses.
• Can deal with intercultural feelings in
which custom and habits cannot be
taken for granted.
The Contingency Approach (cont’d)
• Contingency Characteristics
– An open-system perspective
• How subsystems combine to interact with
outside systems.
– A practical research orientation
• Translating research findings into tools and
situational refinements for more effective
management.
– A multivariate approach
• Many variables collectively account for
variations in performance.
The Contingency Approach (cont’d)
• Lessons Learned from the Contingency Approach
– Approach emphasizes situational appropriateness
rather than rigid adherence to universal
principles.
– Approach creates the impression that an
organization is captive to its environment.
6) Attributes of Excellence: A Modern
Unconventional Approach
• Peters and Waterman’s Approach
– Attacked conventional management theory and
practice as outmoded in almost every dimension.
– Replaced conventional management terminology
with new catch phrases.
– Made key points with anecdotes and stories rather
than quantifiable objective data and facts.
– Academics hate it: too “unscientific”
– “In Search of Excellence” topped the bestseller list
Jim Collins, “Good to Great”: Common
Attributes of Great Companies
• Similar to the “excellence” approach
• Defined rigorous criteria to select “great”
companies
• Found characteristics common to these
companies across industries
• Proposes that emulating these
characteristics will increase the chances of
becoming great
Summarizing
• Early management characterized by single
theories, granular research
• Later “systems” approaches combined theories
• Current bestseller approach concentrates on
attributes and anecdotes
• Good managers learn from it all, adopt what
works for them and their organization, and try
new things